The "effectiveness lag" in monetary policy is the amount of time it takes
A)to collect the data to determine if a policy change is required.
B)for monetary policy to have an impact on inflation and unemployment.
C)for monetary policy to affect the money supply.
D)to collect the data to determine what effect monetary policy has had on the economy.

Question

Quizplus · Accepted Answer

The effectiveness lag refers to the amount of time it takes for monetary policy to have an impact on inflation and unemployment. This is because changes in monetary policy need time to be fully implemented and transmitted through the economy. The lag can be anywhere from a few months to a year, depending on the specific policy and economic conditions. The other options, such as collecting data or affecting the money supply, may be part of the process but do not specifically refer to the effectiveness lag.

The "Effectiveness Lag" in Monetary Policy Is the Amount of Time